The activities of the Planning and Grants Committee of the Council for Higher Education (Israel) are presented in this annual report for 1977-78. The address of the committee chairman emphasizes the need for insuring the essence and quality of Israeli higher education. The report of the Director General summarizes the committee's activities for 1977-78. Foremost on the agenda for 1977-78 were the following issues: determining the ordinary budget, determining the development budget, planning, increased contact with the universities, fostering other contacts, and initiatives for the consolidation and development of the universities. Also discussed in this report are: special allocations for books, journals, and scientific equipment; funds for special purposes; the Committee's relationship with the government, the Knesset, and the Jewish Agency; the committee's library; foreign relations; and subcommittees. Appended are terms of reference of the Planning and Grants Committee, ordinary budget of the universities for 1977-78, development budget of the universities for 1977-78, and data on students and degree recipients. Also appended is a list of committee publications and an organization flow chart. (SF)